MEMORANDUM AND ORDER
J. BRATTON DAVIS, Chief Judge.
By their joint motion, Commodore Savings Association and Commodore Financial Services (hereinafter jointly referred to as
The objecting creditors, asserting that Commodore's motion should be denied because Commodore's proofs of claim were not timely filed, first argue that the substantive law regarding "informal" proofs of claim has been overturned by the enactment of the Bankruptcy Reform Act of 1978, Pub.L. 95-598, 92 Stat. 2549, as amended.
The equitable practice of allowing informal proofs of claim became established in cases decided under the Bankruptcy Act of 1898, as amended, which disallowed late filed claims.
In the alternative, the objecting creditors argue that even if "informal" proofs of claim are allowable under the Bankruptcy Code, Commodore has not met the minimum requirements for establishing an "informal" proof of claim.
1. Commodore alleges that James David Smith is personally liable for a past due indebtedness of 81 South Mobile Homes, Inc. In order to enforce on the alleged personal guarantees of James David Smith to Commodore, Commodore, on April 22, 1986, filed, in the United States District Court for the District of South Carolina, Greenville Division, the companion cases captioned Commodore Savings Association v. Smith, C.A. No. G86-999-3, and Commodore Financial Services Corporation v. Smith, C.A. No. G86-1000-3. In those cases, the plaintiffs asserted claims which total $160,076.54.
2. On May 8, 1986, James David Smith, d/b/a 29 North Mobile Homes and 81 South Mobile Homes (the debtor), filed a voluntary petition for relief under chapter 7 of the United States Bankruptcy Code; thereupon relief was granted.
3. The debtor's schedules list the two Commodore claims—totalling $160,078.54— as unsecured, disputed, and contingent.
4. Commodore advised the clerk of the Bankruptcy Court that Commodore was a creditor of the debtor by a May 29, 1986 letter stating, in part:
5. Counsel for Commodore met informally with the trustee on July 7, 1986, and attended the first meeting of creditors on July 8, 1986.
6. By a July 9, 1986, letter to the trustee requesting notice of any taking of the
7. October 6, 1986, was the last day for filing proofs of claim in this case.
8. Commodore filed two formal proofs of claim on November 25, 1986.
9. On June 5, 1987, Commodore filed the motion presently under consideration which is styled "Motion for Allowance of Claims".
10. Security Pacific Housing Services, Inc., and Borg-Warner Acceptance Corporation ("the objecting creditors"), on July 15, 1987, have filed objections to Commodore's "Motion for Allowance of Claims".
11. There has been no distribution to any creditor in this bankruptcy case.
Has Commodore effectuated a timely, informal proof of claim amendable and allowable under the Bankruptcy Reform Act of 1978, Pub.L. 95-598, 92 Stat. 2549, as amended?
For reasons given below, the conclusion is reached that: (1) informal proofs of claim are valid under the Bankruptcy Code, and (2) the letter of Commodore's counsel to the clerk of the Bankruptcy Court dated May 29, 1986, and the letter of Commodore's counsel to the trustee dated July 9, 1986, together with the listing of Commodore's unsecured claims on the debtor's schedules, and Commodore's attendance at the first meeting of creditors, constitute an informal proof of claim capable of formal amendment after expiration of the bar date.
Commodore failed to file timely a formal proof of claim. Section 501
Although the objecting creditors assert that the substantive law relating to "informal" proofs of claim does not pertain under the Bankruptcy Code, they offer no authority for their assertion.
It has been stated that the enactment of the Bankruptcy Code has not altered the substantive law regarding informal proofs of claim. In re Hart Ski Manufacturing Co., Inc., 6 B.C.D. 697, 698, 5 B.R. 326, 327 (Bankr. D.Minn.1980); and In re Clapp, 57 B.R. 921, 924, 14 C.B.C.2d 408, 411 (Bankr. D.Minn.1986). See also, the following cases, in which a finding that the Bankruptcy Code has not overturned the substantive law regarding "informal" proofs of claim is implicit: Dabney v. Addison, 65 B.R. 348 (D. Va.1985); In re Middle Plantation of Williamsburg, Inc., 48 B.R. 789 (D. Va.1985), aff'd without opinion, 755 F.2d 928 (4th Cir.1985); In re Rite Autotronics Corp., 10 B.C.D. 316, 27 B.R. 599
Commodore has met its burden of establishing an informal proof of claim.
An informal proof of claim in the form of a letter, if timely, may qualify for formal amendment after the bar date. Fyne v. Atlas Supply Co., 245 F.2d 107, 108 (4th Cir.1957); Scottsville National Bank v. Gilmer, 37 F.2d 227, 229 (4th Cir.1930); In re Franciscan Vineyards, Inc., 597 F.2d 181 (9th Cir.1979); In the Matter of Gibralter Amusements, Ltd., 315 F.2d 210 (2nd Cir.1963); In re Anderson-Walker Industries, Inc., 798 F.2d 1285 (9th Cir.1986); and In re Basche-Sage Hardware Company, 56 B.R. 3 (Bankr. D.Or.1985).
In Fyne, the court addressed the issue of whether sufficient notice of a claim had been given in the course of the bankruptcy case to warrant the allowance of the claim upon a creditor's subsequent filing a formal amended claim. That creditor, which sought amendment of its informal proof of claim, (1) had obtained a judgment against the bankrupt, which judgment served as the basis upon which other creditors filed an involuntary petition that resulted in W.H. Calder Company's adjudication as a bankrupt; (2) held a claim scheduled by the bankrupt, which amounted to one-half of the bankrupt's indebtedness; and (3) was represented at the first meeting of creditors by an attorney who had written a letter to the trustee regarding the claim in issue.
The court, in Fyne, at 108, stated:
In the case at bar, the objecting creditors, citing In re Middle Plantation of Williamsburg, Inc., 48 B.R. 789, 790 (D.Va.1985), aff'd without opinion 755 F.2d 928 (4th Cir.1985), state that, at the very least, an informal proof of claim must be a writing which contains a demand against the debtor and manifests an intention to hold the debtor liable. In that case, the creditor seeking amendment of his informal proofs of claim was the chief executive and major shareholder of the debtor.
Under the present facts, the two letters written by Commodore, when taken together with Commodore's participation, constitute by implication a demand against the debtor and a manifestation of intent to hold the debtor liable.
Although, the debtor's schedules listed Commodore as holding disputed and contingent unsecured claims totalling $160,078.54, there is no writing by Commodore to the trustee or to the bankruptcy court which lists the amount of Commodore's claim.
While the objecting creditors assert that in the following cases recognizing an informal proof of claim, there was a writing by the creditor setting forth the specific amount of the claim: Dabney v. Addison, 65 B.R. 348 (E.D. Va.1985); In re Anderson-Walker Industries, Inc., 798 F.2d 1285 (9th Cir.1986); In re Butterworth, 50 B.R. 320 (W.D. Mich.1984); In re Oxbridge Investment Group, 43 B.R. 418 (Bankr. D.N.H.1984); and In re Basche-Sage Hardware Company, 56 B.R. 3 (Bankr. D.Or.1985), there are at least two Fourth Circuit bankruptcy cases in which the only written indication of the amount of the creditors' claims were the figures
The party seeking to amend an informal proof of claim bears the burden of proof, In re Horvath, 20 B.R. 962, 966, 6 C.B.C.2d 1302 (Bankr.S.D.N.Y.1982), In re Benedict, 14 B.C.D. 1323, 65 B.R. 95 (Bankr. N.D.N.Y.1986); Commodore has met its burden. There are two letters by Commodore in the record, one to the clerk of court and one to the trustee, which indicate that Commodore is a creditor of the debtor pursuing its claim against the debtor. Commodore is listed in the debtor's schedules as holding two unsecured claims totalling $160,078.54. Counsel for Commodore attended the first meeting of creditors. These facts, taken together, establish an informal proof of claim capable of later amendment. See, Scottsville National Bank v. Gilmer, supra, in which the court found, inter alia, that the listing of the amount of the claim in the bankrupt's schedules and the creditor's attendance at the first meeting of creditors as important elements in the establishment of the creditor's informal proof of claim. See also, Fyne, supra.
As stated in In re Hart Ski Manufacturing Co., Inc., 6 B.C.D. 697, 698, 5 B.R. 326, at 328 (Bankr. D.Minn.1980):
The letter of Commodore's counsel to the clerk of the Bankruptcy Court dated May 29, 1986; the letter of Commodore's counsel to the trustee dated July 9, 1986, together with the listing of Commodore's unsecured claim on the debtor's schedules, and Commodore's attendance at the first meeting of creditors effectuated an amendable informal proof of claim.
Therefore, IT IS ORDERED, ADJUDGED AND DECREED that Commodore has effectuated a timely, informal proof of claim amendable and allowable under the Bankruptcy Code.
(a) A creditor or an indenture trustee may file a proof of claim. An equity security holder may file a proof of interest. (b) If a creditor does not timely file a proof of such creditor's claim, an entity that is liable to such creditor with the debtor, or that has secured such creditor, may file a proof of such claim. (c) If a creditor does not timely file a proof of such creditor's claim, the debtor or the trustee may file a proof of such claim. (d) A claim of a kind specified in section 502(e)(2), 502(f), 502(g), 502(h), or 502(i) of this title [11 USCS § 502(e), (f), (g), (h), or (i) ] may be filed under subsection (a), (b), or (c) of this section the same as if such claim were a claim against the debtor and had arisen before the date of the filing of the petition.